Arm Mortgage Content Index - Page 1

An Adjustable-Rate Mortgage (ARM) is a type of loan whose prevailing interest rate is tied to an economic index (like one-year Treasury Bills), which fluctuates with the market. The three most popular types of ARMs are one-year ARMs, which adjust every year, three-year ARMs, which adjust every three years, and five-year ARMs, which adjust every five years. When the loan adjusts, the lender tacks a margin onto the economic index rate to come up with your loan's new rate. ARMs are considered riskier than fixed-rate mortgages, but their starting interest rates are generally lower than a longer-term rate. Learn more about ARMs and other mortgage options here.

**HUD Revised Streamline Refinance Transactions** Streamline mortgage refinance applications will be undergoing some changes. Under the HUD revised streamline refinance, there are changes to the mortgage seasoning, payment history requirements, and verification of assets, employment and income. For a streamline refinance without an appraisal there will be a new maximum mortgage amount, and under the HUD revisions, there is is maximum combined loan-to-value amount for the streamline refinance. Read the full letter below for more details on the changes to HUD streamline refinance applications.

**ARM Refinance May Be Required To Lock In Low Monthly Payment** If you have an adjustable rate mortgage (ARM), the loan interest rate will adjust at the end of the fixed interest rate period for the loan. When the ARM does adjust, the amortization of the loan will continue in order to have you pay off the loan in full at the end of the loan term. If your ARM was a loan for 30 years, the amortization schedule must work to get you to pay off the loan in full at the end of the 30th year.

**Refinancing Mortgage Only If You Reduce Your Monthly Payments, Term and Refinance Costs Are Low** Refinancing a first mortgage and/or a second mortgage or home equity line of credit may not be right for everybody. If you refinance the mortgages will you reduce the amount you owe on the mortgage loan? Will you reduce the number of years left to pay on the mortgage once you refinance the mortgage and home equity line of credit or second mortgage loan? If you refinance your mortgage, will the costs you incur by refinancing your mortgage exceed the savings you get? How long will it take for you to break even after you spend money refinancing your mortgages?

ARM refinance may be required to lock in your mortgage rate. It depends on the type of ARM (adjustable rate mortgage) you hold. When you refinance an adjustable rate mortgage or ARM, the lender may allow you to lock in your mortgage rate at a certain point in the loan. Other ARM terms may require you to refinance your loan to prevent your mortgage rate from resetting every year, depending on what your mortgage is tied to.

What is my house worth? Homeowners across the country may find that their home values are dropping and they owe more money on their mortgage than the house is worth. A report from Deutsche Bank predicts that almost 50 percent of homeowners will be underwater on their mortgage by 2011. The real estate property values of homes are dropping, while homeowners have continued to take out equity from their homes over the past decade. With dropping home prices and less equity, more and more homeowners will be underwater on their mortgage and may default on their mortgage.

How do you know if you're the victim of a real estate fraud, a housing scam or mortgage fraud? A reader listed his house for sale with an investor who was also a Realtor. The investor/Realtor transferred ownership of the homeowner's property to himself using a quit claim deed, but left the homeowner on the hook for the mortgage. Is he the victim of a housing scam or mortgage fraud?

Mortgage fraud and mortgage scams increased dramatically in 2008, as homeowners found themselves pushed into mortgages they couldn't afford, or lenders realized they had approved loans based on false premises. The survey found that mortgage fraud complaints surged in 2008. At least 63 percent of all pending FBI mortgage fraud investigations during FY200 involved dollar losses totaling more than $1 million. There were nearly 64,000 Suspicious Activity Reports (SARs) filed in FY2008, with losses of more than $1.4 billion, an increase of 83 percent over FY2007.

What are the true costs of owning and maintaining a home. If you're preparing a budget, you need to factor in these cost of ownership. Not only will you have to replace fixtures, appliances, and carpet, but you'll need to change filters, batteries and smoke detectors regularly as well. Landscaping, snow removal and other costs of owning and maintaining your home and rental property can expand if you're not careful. Before you buy, be sure to calculate the home ownership costs for a home or rental property.

Jumbo mortgage loans used to be much easier to get. Today, it's a lot harder to qualify for a jumbo mortgage. One factor that still influences your ability to get a jumbo loan is a good credit history and a credit score well into the 700s. You can expect to pay higher fees for a jumbo mortgage, as well as a higher interest rate. Closing on a jumbo mortgage ight also require additional time and documentation.

The terms loan modification, streamline refinance and streamline mortgage are terms that sometimes get mixed up in use. For some borrowers, the idea of a streamline refinance or loan modification is a simple process to go from point A -- the current loan and interest rate -- to point B -- the same loan with a lower interest rate and lower monthly mortgage payment. In this process the homeowner expects that the fees will be low and well below going to a new lender to refinance the loan.